Financing health care at the local level: The Community Drug Funds of Honduras

In response to UNICEF's Bamako Initiative, hundreds of privately run Community Drug Funds were established in Honduras during the 1990s, generally under the auspices of a non-government organization and usually with the financial assistance of international agencies. Honduras' Community Drug Funds (CDF) are rotating drug funds intended to: (1) serve as a means of increasing access to care in isolated rural populations, (2) promote the more rational use of medicines and (3) promote community participation in the financing and oversight of primary health care activities. This study is the first to analyse empirically the impact and efficiency of these institutions, relying upon primary data obtained from a survey of 51 of the 450 active CDFs in Honduras. Archival data from Ministry of Health and other sources were also analysed. The structure, operations, and impact of CDFs are detailed, with special attention given to access and quality of care issues. The study found that CDFs are rapidly becoming under-capitalized because of basic management problems, principally in pricing and in medicine purchasing practices. These shortcomings, and more generally, increasing financial pressures on NGO sponsors, are negatively affecting quality and access to care. Given the rate of erosion in CDF assets, unless they are recapitalized, the current average estimated lifespan of a CDF is 5.5 years. If these funds are to be sustainable, changes in their financing, training and supervision will be required. In addressing these issues, Honduran health policy-makers must decide how best to balance the competing goals of holding down costs, while maintaining adequate quality and improving access to care. Copyright (C) 2000 John Wiley & Sons, Ltd.